Activist hedge fund Elliott Management Corporation on Monday hailed the resignation of Klaus Kleinfeld as Chairman and Chief Executive Officer of Arconic Inc., describing the move as "a necessary first step on the path to a new, stronger Arconic for shareholders and employees."

Elliott said in a letter, "We are committed to ensuring that Arconic achieves its full long-term potential. Unfortunately, the Arconic board appears determined to remain an obstacle to that worthy goal. The board continues to insist that shareholders trust its judgment and defer to its wisdom in shaping the future of Arconic. But at this critical juncture, Arconic shareholders simply cannot afford to trust this board's judgment in shaping the future of our company."

In a statement released earlier, Arconic noted that Kleinfeld's departure came as a result of a letter sent to an Elliott executive that showed 'poor judgment.' But the hedge fund insisted that the letter read as a threat to intimidate or extort a senior officer of Elliott Management based on completely false insinuations, a threat that it took seriously and about which the company immediately and privately informed the board. This is highly inappropriate behavior by anyone and certainly by the CEO of a regulated, publicly traded company, in the midst of a proxy contest, it said.